19.11b

NHS Wales Voluntary Early Release Scheme

Analysis of revisions made in the 2012 scheme

Green – Same text as previous document

Yellow – Amended text but with generally the same meaning

No colour – Changed section i.e different text in the two documents.

Old VERS (April 2011) / New VERS (May 2012) / Comments on changes made to the 2012 document
1. Introduction / The Voluntary Early Release Scheme has been designed to assist staff in taking a personal decision regarding their future employment and enable staff who may wish to leave their employment with NHS Wales to do so with an appropriate compensatory payment. / NHS Wales is entering a challenging period of profound and sustained change. “Together for Health” describes the nature of these changes and the accompanying Workforce & OD framework highlight the challenges facing the workforce and its leaders in moving to new patterns of service delivery.
It is clear that such moves will require substantial and rapid changes to take place to the number, location, working patterns and skill mix of staff.
This scheme has been designed as an enabling tool to support the flexibility of NHS Wales organisations in addressing the demands of rapid change and service re-design.
It is not intended to replace existing terms and conditions or policy agreements but rather to supplement the range of options open to individual members of staff and their organisations in meeting the changing circumstances ahead.
The Voluntary Early Release Scheme has been designed to assist staff in taking a personal decision regarding their future employment and enable staff who may wish to leave their employment with NHS Wales to do so with an appropriate compensatory payment. / Revisions made to set the re-position the context and environment within which the VER scheme is operating.
2.
Nature of the VER Scheme / None / VER is a scheme where it is of mutual benefit, to both an employee and their organisation, for an individual to voluntarily choose to leave their employment, with the agreement of that organisation, in return for a severance payment.
VER is not a contractual entitlement and is not a redundancy, compulsory or voluntary, as covered by section 16 of the NHS terms and conditions of service handbook. / Statement included to ensure clarity regarding the mutual nature of the scheme being an agreement between an employee and an organisation and not an entitlement.
3.
Scope of the Scheme / (General Principles) The Scheme will be operated by all NHS employers within Wales. The employing NHS organisation is responsible for the costs associated with any agreed compensatory payments.
Subject to the eligibility criteria in section 3, the Scheme is available toall staff.
The Scheme is entirely voluntary from the employer’s and employee’s perspective and there is no legal obligation on the part of the employing NHS organisation to accept any individual application.
Access to the Scheme is at the discretion of the relevant employing NHS organisation and employees do not have a right to access the Scheme.
There is no guarantee that voluntary early release will be automatically approved.
Employees cannot be required to accept voluntary early release.
Robust corporate governance principles must be followed.
The Scheme is open to 31st March 2012 and any applications received by this date will be considered. The Scheme will be subject to review after this date and there is no obligation on the part of any NHS organisation to extend the Scheme beyond this date.
An employee’s proposed leaving date will be subject to negotiation and mutual agreement between the employer and employee.
The Scheme is independent of any other schemes and is open irrespective of whether an employee is ‘displaced’ or ‘at risk’.
Any early release will mean that employment will usually come to an end by mutual agreement. Unless otherwise agreed, there will be no requirement for either party to give notice or for the NHS organisation to make a payment in lieu of notice. / Access to the Scheme is at the discretion of the relevant employing NHS organisation
Employees do not have a right to access the Scheme.
Subject to the above and the eligibility criteria in section 4, application to the scheme may be made by any member of staff.
The employing NHS organisation is responsible for the costs associated with any agreed compensatory severance payments.
The Scheme is entirely voluntary and there is no legal obligation on the part of the employing NHS organisation to accept any individual application nor an obligation for any employee to apply for the scheme or accept voluntary early release.
Each application will be considered on its own merits and there is no guarantee that voluntary early release will be approved..
The Scheme is open until further notice but may be withdrawn at any time.
VER is a scheme under which an individual employee, in agreement with their employer, chooses to leave employment in return for a severance payment.
As there may be significant financial and lifestyle implications for the employee, NHS organisations should support the decision making process by assisting individuals with their understanding of these factors. However, employers are not in a position to offer independent financial advice to their staff. / Amendment included to clarify who is responsible for costs and support provided by organisations for individuals.
4.
Eligibility / To be eligible for a compensatory payment under this Scheme, applicants must have been employed within the NHS in Wales for a minimum of one year, and must not have resigned or have accepted another post within NHS Wales at the time of application.
Applications will be considered provided they meet the conditions set out in Section 5 / To be eligible for a compensatory payment under this Scheme, applicants must have been employed within the NHS in Wales for a minimum of one year, and:
  • have not resigned or have accepted another post within NHS Wales or DHSS at the time of application.
  • have not given formal notice of their intention to retire prior to the date when applications are formally sought
  • have not been notified of the date of termination of their contract of employment for any other reason
  • must not be under notice of a Capability Hearing into their performance
  • must not be under notice of a Disciplinary Hearing into their conduct
/ Expanded section on eligibility to tighten up governance in respect of decisions to approve.
5.
Compensatory Payment / The compensatory payment is a ‘one off’ payment and will be calculated as follows:
One month’s pay for each completed year of cumulativeservice with the NHS up to a maximum of 12 months pay. (subject to the notice provisions below)
A month’s pay will be defined as the current substantive basic salary and any contractual elements of pay excluding pension. An employee’s seconded salary will only apply if they have been seconded in that role for more than 4 continuous years.
The first £30,000 of any compensatory payment will be tax free, and any remaining amount will be subject to tax and national insurance deductions.
Where, however, such payment includes an element of pay in lieu of notice, this will be separately identified and netted off from the compensation calculation and will be subject to tax and national insurance deductions. / The compensatory payment is a ‘one off’ payment and will be calculated as follows:
One month’s pay for each completed year of reckonable service with the NHS, with a maximum of 12 months pay.
The calculation of an employee’s reckonable service for the purposes of a VER payment, is calculated on the basis of the service up to the leaving date, and will comprise continuous full-time or part-time employment with the present or any previous NHS employer but with the following additions:
- where there has been a break in service of 12 months or less, the period of employment prior to the break will count as reckonable service;
- at NHS organisation’s discretion, any period or periods of employment with employers outside the NHS can be included in reckonable service,where this or these can be judged to be relevant,and can be considered as being associated with the provision of NHS services. Such consideration will be subject to the break in service considerations as noted above.
The following employment will not count as reckonable service:
- employment that has been taken into account for the purposes of a previous redundancy, or loss of office payment by an NHS employer;
- previous NHS service, which has already been recognised for payment of a redundancy payment,or compensatory payment
This payment may be increased by up to three months to take into account any notice period agreed under paragraph 6 below, subject to an overall total of not more than 15 months pay.
The maximum annual salary that may be taken into account for calculation purposes is £150,000.
A month’s pay will be defined as the current substantive basic salary and any contractual elements of pay excluding pension. An employee’s seconded salary will only apply if they have been seconded in that role for more than 4 continuous years.
The first £30,000 of any compensatory payment will be tax free, and any remaining amount will be subject to tax and national insurance deductions.
Where, however, such payment includes an element of pay in lieu of notice, this will be separately identified and netted off from the compensation calculation and will be subject to tax and national insurance deductions. / Included the term “reckonable” service and the specifics defining such service to provide consistency with the definition and approach within the NHS Terms and Conditions Handbook.
The notice period extension has also been moved to this section from section 7 in the previous document.
A new ceiling of £150,000 has been included following discussion with WG.
6.
Notice / None
(bullets below are under general principles)
  • Any early release will mean that employment will come to an end by mutual agreement. While there is no requirement for either party to give notice, a notice period or a payment in lieu of notice of up to three months may be mutually agreed. (This comes under general principles in the current VERS)
  • An employee’s proposed leaving date will be subject to negotiation and mutual agreement between the employer and employee. (This comes under general principles in the current VERS)
/
  • Any early release will mean that employment will come to an end by mutual agreement. While there is no requirement for either party to give notice, a notice period or a payment in lieu of notice of up to three months may be mutually agreed. (This comes under general principles in the current VERS)
  • An employee’s proposed leaving date will be subject to negotiation and mutual agreement between the employer and employee.

7.
Conditions / The NHS organisation must clearly be able to demonstrate:
- A payback period of no more than one year. This may be extended where an employee works a period of notice or receives a PILON subject to a maximum period of 15 months.
- Eitherthe post will be permanently removed or a restructuring of other posts will enable equivalent funding to be removed on a recurrent basis.
- The overall reduction in staffing costs is sustainable.
- Applications are weighted against the impact of the loss of the skills and experience of the individual concerned.
- That there is no detrimental effect on patient safety, quality or efficiency. / (Section now combined with Approval Process) / Elements of this section have now been incorporated in the Governing Principles within Section 7.Approval Process - of the new document.
8. (New 7.)
Approval Process / Employees wishing to apply for early release under this Scheme should make an application on the form attached at Appendix 1.
Applications should be passed to the Director of Workforce & OD in the first instance and will then be forwarded to the Finance Director, whose role is to identify the savings that can be achieved within a one year period or, in appropriate cases, a period of up to 15 months where an employee has worked their notice period or received a PILON.
All applications need to be supported by the relevant Line Manager and will require HR & Remuneration/ Committee/Audit Committee approval.
Payments under a VERS scheme are classified as ‘ex gratia’ payments and they therefore need to be managed in accordance with the losses and special payments procedure detailed in a Welsh Office Health Department document, Manual of Guidance (Wales) produced in December 1998. Under this guidance payments over £50,000 require WAG approval.This must be actioned and approved prior to submission to the NHS organisation’s Remuneration Committee. / Governing Principles
In considering individual applications for early release, organisations must:
  • employ robust corporate governance principles
  • be mindful of the need to show responsible use of public monies
  • be able to demonstrate value for money
  • take into consideration the impact, in both the short and long term, on the effectiveness of the organisation and its remaining employees.
Developing the case for early release
A business case must be made for each application, demonstrating:
  • how the work undertaken by the applicant can be redesigned, re-assigned, or undertaken in a different way, and
  • that the saving from the post, or an equivalent amount, will be removed on a recurrent and auditable basis
  • that the cost of the individual’s release will be recovered through a payback period of no more than one year. This may be extended where an employee receives a payment in lieu of notice.
  • that consideration is given to the risk of the loss of skills and experience, and to the potential impact on remaining employees
  • that patient safety, quality and efficiency can be maintained or enhanced as a consequence of the release.
A business case which includes a payback period of longer than one year may be submitted providing there is a clear demonstration that approval of such VER payment or payments would facilitate wider workforce redesign and/or skill mix change. The business case must include a cost benefit analysis to demonstrate the profile and timescale during which savings will be realised.
The approval process
Once an application for release has been jointly considered by the Directors of Workforce & OD and Finance and the business case has received their support, it must be approved by the organisation’s Remuneration and Terms and Conditions Committee.
Where, however the Chair of the Audit Committee is not a member of that committee, the endorsement of the Audit Committee should also be sought.
Obtaining Welsh Government Approval for ex-gratia payments
Payments under a VERS scheme are classified as ‘ex gratia’ payments and they therefore need to be managed in accordance with the losses and special payments procedure detailed in a Welsh Office Health Department document, Manual of Guidance (Wales) produced in December 1998.
Under this guidance payments currently over £50k require WG approval. This must be obtained prior to the employee being notified of the outcome of their application. / Strengthened section to support the governance around decision making and to set out the requirements of business cases to ensure the clarity regarding the payback of the costs associated with VER approvals. The section also includes clarification on the approval process in organisations to include approval by Remuneration and Terms and Conditions Committees and where, the Chair of the Audit Committee is not a member of that committee, the endorsement of the Audit Committee also.
The section allows for a payback period of longer than one year to supportwider workforce redesign and/or skill mix change and requires organisations to produce a profile and timescale during which savings will be realised if they are choosing to proceed on this basis.
9. (New 8.)
Application Process / None
(Sentence under process)
A model application form for application for VER is attached as Appendix 1 / A model application form for application for VER is attached as Appendix 1
10. (New 9.)
Compromise Agreement / By agreeing to early release, employees will be required to waive all rights to redundancy or compensatory benefits associated with redundancy or premature retirement. They will also be required to waive the right to pursue any other employment related claims through the courts or an Employment Tribunal. Any early release must be formalised by means of a CompromiseAgreement, which will set out the financial and all other terms on which the employment relationship will end.
TheNHS organisation will meet reasonable costsfor the necessary legal advice for theemployeeup to a maximum of £250 plus VAT provided a valid Compromise Agreement is entered into. / By agreeing to early release, employees will be required to waive all rights to redundancyor compensatory benefits associated with redundancy,premature retirement,or any other employment related claims through the courts or an Employment Tribunaland must, therefore, enter into a compromise agreement drawn up by a suitably qualified independent adviser. The Agreement will set out the financial and all other terms on which the employment relationship will end.
Where the employee seeks such advice from an independent and qualified legal adviser, theNHS organisation will meet reasonable costs, up to a maximum of £250 plus VAT, provided a valid Compromise Agreement is entered into. / Clarification included on the compromise agreements being drawn up by a drawn up by a suitably qualified independent adviser.
11. (New 10.)
Access to Pension following compensatory payment / This Scheme is voluntary and where staff haveopted to receive a compensatory payment they may, subject to the relevant pension scheme rules, seek access to their pension. The NHS organisation will not be responsible for the payment of any pension enhancements. It is recommended that individuals wishing to explore any such options seek advice from the NHS Pensions Agency and/or the relevant Payroll Department. / This Scheme is voluntary and where the employee hasopted to receive a compensatory payment they may, subject to the relevant pension scheme rules, seek access to their pension. The NHS organisation will not be responsible for the payment of any pension enhancements. It is recommended that individuals wishing to explore any such options seek advice from the NHS Pensions Agency and/or the relevant Payroll Department.